Step 1: First, draft a mission statement for your plan. A leader decides on the mission and how the mission will be accomplished, right?

Step 2: Select the plan’s investments. Your plan’s investment policy statement (IPS) will specify which index funds to pick for the plan. It will also specify why you picked index funds and how you will monitor them. In the IPS you must also explain why you decided not to use managed funds.

Step 3: Hire the plan’s vendors. Using your mission statement’s guidelines, hire vendors and ensure that they aren’t paid more than the current benchmark.

Step 4: Manage your plan. Guided by your mission statement, so that it has truly low-cost services and a mix of investments that will match the market’s performance.

Step 5: Monitor your plan. Each month, use the guidelines in your mission statement to ensure that you have accomplished your mission of setting up an optimal 401(k) plan.